Thu, Mar 13 2008, 07:15 GMT
by Cornelius Luca
The dollar respite on Tuesday was only a one-day wonder. The currency collapsed on doubts that the Fed actions will be sufficient to patch up the credit crunch and news that budget deficit surged to a record in February didn’t help. The US retail sales due today is unlikely to support the dollar. Following a recovery today, the selling pressure should continue.
Euro/dollar
Euro/dollar exploded to a new record high on Wednesday. To repeat, I still like long positions in line with my model, long since February 14 – only a break below 1.5230 would change that. The pair is certainly overbought, but only short-term weakness is possible. Immediate support is at 1.5535. The next level is at 1.5490. Below 1.5415, there is further support at 1.5350. Initial resistance is at 1.5590. Further resistance comes at 1.5660. The next level is now seen at 1.5760.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen negated its bullish reversal as it reversed all of its Tuesday’s gains. This choppy market prompted my system to go short again. It looks bearish, but I prefer to be square. Initial support is at 101.10. The next level is 100.70. Below parity, distant support is at 99.40. Immediate resistance is now seen at 102.30 from a 50-point pivot, which targets 101.80 and 102.80. Above 103.50, distant resistance remains at 104.50 from a 50-point pivot that targets 104.00 and 105.00.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar surged to a three-month high on Wednesday and this bodes well for my model’s long position since February 2. Initial resistance moved up to 2.0360. Distant resistance looms at 2.0465. Immediate support is now seen at 2.0220. Below 2.0140, the next level is seen at 2.0085.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Just like dollar/yen, dollar/Swiss reversed its “bullish” turn, sinking to a new record low, and luckily this turned my model short again. The medium-term outlook remains bearish. Immediate support now comes at 1.0075. Below .9990, support is seen at .9830. Initial resistance now comes at 1.0190. Above 1.0270, the next level is 1.0353.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
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